An upmarket hotel, a transport interchange and new one-way roads have been proposed to tackle the traffic nightmares plaguing Sydney Airport.

The NSW Roads Minister, Duncan Gay, and the chief executive of Sydney Airport, Kerrie Mather, confirmed the measures on Sunday. They are designed to relieve chronic traffic congestion that has helped make the airport the most unpopular in the country.

Sydney Airport is under pressure to invest in transport infrastructure and improve the traveller experience, as a rival airport at Badgerys Creek draws closer and passenger numbers surge.

Ms Mathers said a draft plan for congestion-busting work around the T2 and T3 domestic terminals would assist about 150,000 people who travel to and from the airport each day.

It includes a new transport interchange including a bus station and capacity for about 5500 vehicles to encourage greater use of public transport.

A proposed four- to five-star hotel with about 430 rooms would accommodate airline passengers.

The works, previously flagged in the airport’s transport master plan, also involve a new one-way road system connecting Shiers Avenue to Qantas Drive and linking the two domestic terminals.

To be completed by the end of next year, the five-lane road would boost capacity at major intersections and create more "green light" time.

The draft plan is on exhibition until September 22. Construction is due to last three years, creating substantial disruptions.

The airport plans to double the number of passengers it handles each year by 2033.

Work already approved around the international T1 terminal is due to start next month. Combined, the improvements total $300 million.

“These works will dramatically improve traffic flow around the airport, with our traffic models showing intersections clearing within most traffic light cycles and improvements in travel times,” Ms Mather said.

NSW Roads Minister Duncan Gay said the government was also spending $282 million on roads around the airport, including $40 million in federal funding. Some work is already underway.

The work will support the $13 billion WestConnex motorway, which will better link Western Sydney to the airport and Port Botany.

A preferred design released on Sunday includes making Robey and O’Riordan streets one-way northbound and southbound. Marsh Street will also be widened. The work will link to road changes planned inside the airport.

“The NSW government is committed to working closely with Sydney Airport to improve the arrival and departure experience for local travellers and visitors to our great city,” Mr Gay said.

The announcement follows Fairfax Media reports on Saturday that the government has backtracked on $30 million worth of planned Westconnex support works at Parramatta. The roads were announced last September, but have since been found to be unviable, forcing planners back to the drawing board.

Tourism Transport Forum acting chief executive Trent Zimmerman welcomed the upgrades. But he called on the government to reduce the current $16.40 train fare from the city to the domestic terminal and provide extra bus services to make the most of the planned interchange.

The airport improvements follow a report by the Australian Competition and Consumer Commission in April that found Sydney Airport was rated the worst of the country's four biggest airports, amid complaints about kerbside congestion at the international and domestic terminals.

The airport also had the highest car-parking revenue per space, as well as the highest car-parking margin per car park space, of the country’s four-biggest airports.